What would you do.

atush

surfinsfree wrote: »

We have been saving hard over the last 5 years and it is time to do something useful with the money . So as the title suggests what would you do.

Pay off my mortgage of £95k

Or

Invest in a buy to let.

I'm 33 and have a baby on the way and a pension scheme that looks like it will be worth very little at retirement.

Well theres your answer, your pension is too small- bum p it up.

Dont want to tie up all the cash until 55? Then use your S&S isa allowance and drip feed into it.

It is daft to own a house, and then BTL if you dont have a good pension and other investments like S&S isas.

you are basically saying to put all your eggs in one basket (ie property)

And this is all w/o saying that property is heavily taxed ie both income and capital gains and the govt has announced they will be limiting the tax benefit of BTL so that makes it an even worse prospect.

surfinsfree

Thanks for the replies. ... so I live near bournemouth and any decent house with 3 beds is at least 250k!!! So to put down 40% on BTL is most of my money.

My property is 2 beds but we are going to do a loft conversion next year for around 20k. Raising the value to we'll over 200k. It is a flat which has its difficulties but with 3 beds, a great garden and walking distance to the beach we would definitely be happy living here for the foreseeable future.

We have nearly 100k in savings and the remaining mortgage is 95k. Need to save another 15k for converting the loft and I could be mortgage free next year when my fixed rate ends.

surfinsfree

Luckyinlife wrote: »

If it was me i and i had 95k sitting around and it only took me 5 years to save it i would invest it into a buy to let or maby even 2 40k deposit on each

your obviously doing really well to save that kinda money in 5 years so get buy to let or 2 least try it then the next 5 years save agine and pay your mortgage off best of both worlds and youd still be under 40

or do it the other way around pay mortgage off now then save agine and do the buy to let in a few years

We bought a good fix up flat 8 years ago based solely on my salary. We started up our own business and for the next 2 years lived only on one wage while we paid off the business loan. Through a bit of blood sweat and tears the business started making ok money and ever since then we have basically carried on living on my wage and saving the rest.
We've never been flashy people and it has lead to us being in this lucky situation.

Watty1

If I were 33 and in your position I would pay off the mortgage and start investing in a pension to make sure there is something good at retirement - or - invest in S+S ISA.
A BTL sounds a great option (I have one) but only works when the property is let out, void and its costing you. Plus there is the looking after and finding tenants and re-decorating between tenancies. Our BTL is a previous house that we rented out when we moved because I was aware I had no pension and I wasn't sure what to do about that. So I kept the house. Luckily it worked out well.
But had I thought ahead in my early 30s I'd have been dumping money into a pension plan and as much as I could.
You are in a great position - but - putting all your money into property may be risky when you don't know the tax position on that down the line.
Plus - owning your own house - gives you a lot of security.